Staff: Mentor

Its simply a biproduct of economic growth. More goods are available and more people have more money to spend on those goods. So the value of the money will go down.

As long as its low, its a healthy thing. But DEflation can be very bad.

Imagine if prices DECREASED constantly. Sounds great, doesn't it? But wait, if prices are going down, why not wait a week or two or three or ten before buying that new car? With deflation the motivation for immediate spending decreases and the economy quickly grinds to a halt.